The curious comparison of the purchasing power of several countries

People are always creating very interesting methods and studies so that more accurate analyzes can be done. Based on this idea, that’s why Big Mac Index.

This form of measurement compares the purchasing power of different countries. He reported, for example, that a dollar should cost R$4.27 in Brazil, thus proving that the Brazilian currency had depreciated by 17.2% compared to that of the United States.

But, after all, what is a Big Mac index? What exactly is it? How can we use it? If you have these doubts, don’t worry, because we are going to explain everything to you right now. Without further ado, read on to find out what the famous Big Mac ticker is.

Big Mac Index: what is it and why was it created?

Incredibly, if this name caught your eye and you remember the famous McDonald’s snack, know that it has something to do with it.

This is due to the editors of the magazine in 1986 The Economist He created this metric to compare the purchasing power of different countries’ currencies, all using the Big Mac snack as a parameter.

The idea used to support the Big Mac Index is that, since this is a standard snack, that is, it has the same ingredients in many countries, it should sell for the same price, if the exchange rates are correct. However, we know that this is not what happens.

Thus, if the value of the snack is higher in a particular country, this indicates that the currency in that location is overvalued against the US dollar.

On the other hand, if the snack is cheaper, it indicates that the currency is undervalued. And this is exactly the case in Brazil, as mentioned at the beginning of this article.

However, although this is an interesting way to understand more about the relationship between this snack and the countries’ currencies, the Big Mac Index should be used with caution.

That’s because Big Mac production costs vary from country to country, depending on differences in supply and demand. There is a whole path behind it, such as: raw materials, laws, costs, taxes, among other factors.

Another important point to make is that the Big Mac does not take into account exchange rate fluctuations. Therefore, you may not always get the correct values. So use it, but not as an absolute truth.

What is the most expensive Big Mac in the world?

Well, even with all this information covered, we know that there are still some doubts about this indicator. Without a doubt, the most popular is: What is the most expensive Big Mac in the world?

According to a search by HelloSafe Brasil, the world’s most expensive Big Mac was found in Switzerland, costing the equivalent of R$37.41. The cheapest one is from Egypt, which costs only R$9.27.

Meanwhile, Brazil ranks 60th in the ranking of countries selling the most expensive Big Macs around the world.

Here, you can buy the combo with fries and soda for R$32.